(Caution: this article contains some tongue-in-cheek language.)
Fastned published its 3 rd quarter results on Tuesday, October 11. The webcast is available for replay here , and the slides are here document. I looked at few financial advice websites in advance.
Most likely, you made a mistake by doing that. They were unsure of the nature of Fastned as a business. It was determined that, in order to meet some analysts’ modest growth projections—which I felt were overly conservative—a CAGR of between 90% and 100% was required, which is totally impractical as every investor is aware.
When examining the results for the first three quarters in euros, it was simple to discount the rise while blaming inflation and skyrocketing energy prices. Oh, and from Covid-19 the previous year, we did still have some challenges. Just a coincidence caused the increase from €7,571,000 to €22,688,000. Who grows at a 200% rate? No ethical expert anticipates the €12,471K in sales for 2021 to quadruple to more than €37,500K. Don’t worry about the fact that this non-spreadsheet analyst’s predicts it.
Okay, so the first quarter of 2021 was still a little down, but things picked up in the second and third. When we compare sales volume to revenue, the picture is very different. The growth YoY for the second quarter in terms of kWh delivered was 175%, but just 149% for the third. We are still much above the improbable CAGR of close to 100% even without inflation, oil price problems, or Covid-19 distortions. The picture of volume growth is similar to the picture of revenue growth.
The fact that Fastned grows too quickly must be the only explanation. This is the conclusion that every sane stock analyst will reach. However, this was also the rate of growth before to Covid-19. It is not a mistake or an accident because it is in the company plan.
If this is sustainable, that is the question. Fastned has a strong response to that query as well. No, it is not; Fastned’s expansion has a limit. In a decade or two, or possibly three decades, Fastned will approach that ceiling. Yes, we are a long way from that ceiling. Sales can increase as long as there are more electric vehicles than the current 2% that travel through Fastned’s stations. Sales will continue to increase as long as Fastned can add additional chargers to its existing stations and launch new ones. The cap is not in sight as long as there are more nations to expand the network to.
The same holds true for all rival charging businesses. The opportunity is the same for Ionity, Shell Recharge, Tesla Supercharging, GreenWay, and all of those other charging businesses. The only way to compete in the electrical market is on service, customer satisfaction, uptime, location, and all those other challenging KPIs. As an electric vehicle (EV) driver, I favor more and better charging stations throughout Europe, or possibly the entire planet. I have a stake in this because I own stock in Fastned.
I discovered the following after listening to the Fastned Q3 earnings call: Fastned is still expanding and expanding at an increased rate. Another 40 stations are prepared to open in Q4 following the opening of 26 new stations in the previous three quarters.
A new station’s opening can take nine months to two years. The shovels don’t start working till the past three to four weeks. The remaining time is required to get it shovel ready, remove bureaucracy, and wait for a network connection. Because of this, only about half of the costs associated with a new station show up as CAPEX on the balance sheet. The remaining expenses are for development and are recorded directly in the profit and loss account.
Fastned has just received another €75 million from an investor to help with this rapid growth. Just over 2 million shares were available for €36.90 from Schroders Capital. Fastned is now able to construct an additional 100 or more stations along European roadways.
The new nation organizations in Poland, Denmark, Italy, Ireland, Spain, or Portugal have not received any updates. Fastned is looking for individuals who can expand their network to include these nations. I’m now retired, and I never made a great manager. In addition, I’m Dutch. Please assist them in making me wealthy if you are not at all like me, enjoy a challenge, and are looking to advance your career.
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